Growing finance capability represents a real alternative to the big four
The latest in a series of securitisation deals for asset financier Capital Finance means the company is now Australia’s largest issuer of A$ denominated non-RMBS securitisations in 2010. The deal brings the total of securitisation funding raised by Capital Finance in the past 13 months to A$1.6 billion.
According to Capital Finance Managing Director, Bernie Campbell, the deal cements the company’s position as the largest independent financier of motor vehicles and equipment outside the big four banks and provides a firm foundation to pursue plans for further growth in 2011.
“We have been 100 per cent committed to growing our core motor dealer and equipment finance business and have done so despite the global financial crisis, during which we held on and actually grew the business while others were closing their doors,” said Bernie Campbell.
“So, for example, we’ve seen around a 15 per cent increase in new motor retail business customers in the two years since 2008, which translates to a growth in the motor retail book in the order of $300 million along with a near doubling of profit in that period. And, in the business overall, despite a slight dip in customer numbers between 2008 and 2009 as at November 2010 we’re looking at a net steady customer growth and profit increase of over 60 per cent.”
According to Mr Campbell, the significance of the deal goes beyond the numbers – as pleasing as they are.
“The real significance to us is the wider implications and benefits of completing deals such as these,” said Mr Campbell.
“They further boost our capability as a speedy source of funding that offers businesses a real alternative at a time when competition – or lack thereof – in the mainstream banking sector has been flagged as a serious potential inhibitor of economic activity.”
The deal in question is the third securitisation on Capital Finance’s books in just over a year, and totals $500 million. Known as Bella 2010-2 it will raise some $408 million in funding for Capital Finance. The final book comprised 14 investors, five of which are new, divided equally between banks and fund managers.
“What’s particularly pleasing about this latest deal is that it was originally an AS367.5 million deal but we were able to upsize it due to keen interest,” said Mr Campbell.
“This is a strong positive sign for 2011, when we see real opportunity to extend our securitisation capability to also include our equipment finance portfolio.”